Stagnant and broken currency markets – the need to start again
The truth, or the facts never lie.
The cryptocurrency markets are stagnant and largely broken – despite all the hype in social media and by so called crypto-influencers and commentators, the reality is that the market capitalisation of cryptocurrency is at the same value as it was in October 2017, and has so far never reached its peak of $768bn in January 2018. Arguably, the main triggers for cryptocurrency are by traders who use the volatility of cryptocurrency markets to make short-term profits. Many of the 2,144 markets today have no underlying value and are driven by speculation. Most cryptocurrencies are bench marked in price by the volatility of Bitcoin – this creates layered volatility as the volatility of the native currency is valued against the volatility of Bitcoin which is has no intrinsic value.
The demand for Bitcoin is mainly driven by people exchanging other cryptocurrencies for something less volatile or more trustworthy than their native currency, by people looking to exit into FIAT, to ride an increasing, short term price wave in Bitcoin, or by illegal activities. All of the exchanging back and forth has served cryptocurrency exchanges well and created profit for intermediaries, and now there are too many exchanges; some of which are artificially inflating volume. The markets will continue on this basis, so long as enough traders are using them to generate profits from other trader’s losses.
Current market conditions mean that the scope and potential for using cryptocurrency in the real world by real people is limited. Currency with moderate to high volatility is not secure, and unlikely to be adopted in the real economy. Cryptocurrency as a valid mass adopted commodity with value is currently non-existent, and there is no compelling reason to choose cryptocurrency over FIAT. Cryptocurrency cannot exist without FIAT and the mainstream banking system – this is the exit currency for everyone. If traders cannot exit to FIAT, their cryptocurrency is worthless.
The XOV community acknowledges these facts, and support the XOV vision that in order for digital currency to become a real world commodity, it has to change. It has to become secure, stable, and be engineered for longevity. It has to be scalable and there has to be a reason for real people to need it.